SNCB Online Challenge Solution by Benchmark company at Solvay Business Game 2013

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SNCB Online Challenge Solution by Benchmark company at Solvay Business Game 2013

  1. 1. 17 February 2012Single card for network mobility:creating multifunctional loyaltysystem in Belgium
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  3. 3. cv3Source: Benchmark company analysis, case data.Current ticketing system isn’t perfect and definitelythere is a room for improvement1 Overview Stakeholders BenchmarkingMarketInfrastructural hubs of networkedmobility are being createdaround stations…… but still all services require separatecards and there’s no single solution fornetwork mobilitySeparated Blue-bike cardrequired (Subscription€10 + usage payment)Single tickets/MOBIB cardrequired (unified urbantransport card)Cambio Card requiredB-Parking card/singleticket required 0 20 40 60 80 1002011 20122010Cambio-locationsCambio-carsParking areas near stations built in 2010-2012Tickets bought online/inthe ticket office requiredService Type of ticket/cardBike rentalCar rentalParkingCitytransportTrainsNumber of Cambio car rental locationsand cars provided near stationsThe integratedticketing systemto simplify networkmobility should beimplemented
  4. 4. cv4Source: Benchmark company analysis, case data.The new model should meet goals of key stakeholders: thegovernment, citizens and 4 transport operators1 Overview Stakeholders BenchmarkingMarketOperatorsCitizensStakeholders Specific objectives and conditions of stakeholder Shared goals• Faster boarding and changing transport• Minimize offline ticket sales,automatic card charging• Smart pay-as-you-go system• Easier, low-threshold transport for the customer• Stimulate a technical compromisebetween operators• Reduce pressure from car traffic on the cities• Operators independence• Remain current ticketing during the new systemimplementation• Improve 3rd Party Payer system• Decrease fraud• CRM at the level of individual customer• Phased transition to smart card• Good cost to profit ratio• Continued compatibility with the current fares• Maintain the role of the train conductor• Separate customer management and fares offeringGovernment
  5. 5. 5Source: Benchmark company analysis, case data.There are many successful interoperable models with SouthKorean as the most suitable for the Belgium situation1 Overview Stakeholders BenchmarkingMarketHong-KongSeoulMoscowTypes of cardsServices provided• Home portable card reader - to check the balance on the card (Denmark, Hong Kong)• Cards as a payment instrument in retails stores, cafes, vending machines (South Korea)• Special security protection system against loss or theft of the card (England)NetherlandsOV-chipkaartT-money cardOctopus card• Issued by transportauthorities (monthlylimited /unlimitedpasses)• Issued by banks• Just check-in• No info for customer• Plans for hugemodernization- as an electronic purse-as a means of storinga travel product• Check in/outcompulsory• Anonymous(Child/Adult/Elder)• Personalized• Branded cards• Airport Express Tourist• Single journey cards(reusable)• T-money journey cards(incl. affiliated cards)• T-money chip• City transportation• City transportation• TrainsOctopus Rewardsprogram - rewards atmerchants that areprogram partners• Disposable (no top-up)• Anonymous (reusable)• Personal (possible tostore tickets and otherproducts >1 month)Personal cards areavailable for thecitizens of Belgium,Germany andLuxemburg• City transportation• Retail stores• Parking• Leisure activitiesFunctioning Special features• City transportation• Retail stores• Parking• Leisure activitiesFor cards issued bybanks trips cost lesswhen customer travelsa lotOther ideasSingleMoscow card• Just check-in• Detailed passengerinformationWide variety ofpartnersDeposit system fornon-personal cards forforeigners• Check in/out compulsory
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  7. 7. 7Source: Benchmark company analysis, case data.We offer the simple interoperable ticketing model that fitsstakeholders conditions…2 Proposition Product details Marketing Distribution Business model Plan & RisksConcept1 Please, refer to the next slide to look at the product features deeply2 Including current fare types of different operators.At the heart of the system there will be a multifunctional payment & loyalty chip card for Belgians with asmartphone chip option and non-personal rechargeable & reusable chip card made primarily for foreignersProducttypesFaretypesServicesprovidedIssuersBanks SPV SPV SPVPay asyou goSeasonal 2 Pay asyou go• ID card linkage• Provides maximum varietyof services of new ticketing model• Deposit payment required• All features of chip card are included• The main difference is an integration withcustomer smartphone• No linkage with ID (for non-residents)• Rechargeable and reusable: one can buythe card, charge/recharge it and thenreturn it in the exchange of deposit valueLoyalPay asyou goSeasonal 2UsersBelgiancitizensBelgiancitizensForeignpeoplePublictransportAdditionalservicesE-money PublictransportAdditionalservicesE-moneyPublictransportAdditionalservices
  8. 8. 8Source: Benchmark company analysis, case data.…and has great features in terms of services provided, loyaltyprogram breadth and different types of issuers and fare types2 PropositionIssuers andfare typesProduct features Short descriptionServicesLoyaltyprogram• Public transport services is theheart of the system• Includes services of 4 operators(trains, buses, trams, subway)• The interoperable concept willinclude car parking, rental ofbikes and auto, leisure activitiesand so on (provided by operatorsand its partners)• The wide loyalty program willallow to use the card to pay inretail stores and other partners• There will be an opportunity touse for Internet payments+ -• The program will includetransport operators and widevariety of partners that giveusers miles points for everyusage of its services• Factors defining the amount ofpoints: type of service, type ofcustomers amount ofpurchase/length of trip/trafficabsence, intermodalitycombination and so on• Points will be used to pay for anyservices provided by the wholeloyalty system• Opportunity to transfer points ordonate them• SPV will issue the majority of cards and give theissue rights to the banks• Banks will issue co-branding cards that containspecial bonuses provided by them• Pay as you go – smart system that allows consumer touse the products at the optimal price• Seasonal – fare for the certain time periods (incl. theoption of separate or combined usage of services)Product details Marketing Distribution Business model Plan & RisksConcept
  9. 9. Develop mobile/web application withwide gamification options based onmile points that stimulates people touse product more, compete with eachother, etc (together with exploring allinformation about the services)9Source: Benchmark company analysis, case data.The only way to succeed with such product is to informcitizens, involve them into its creation and stimulate to use2 PropositionStimulating to use itReach quantitative and qualitative growth by offering differentincentives and providing customers with the unique experienceGetting to know itSpread the idea of new ticketing model by involving customers tocreation process, educating them and stimulating word of mouth21Involve Belgian citizens into productdevelopment through creation ofdiscussing crowdsourcing platformand surveys “Make your futureexperience awesome” (channels:official site, social networks)Create simple and clear “how to”guides and brochures emphasizingadvantages of the card and theimportance of wide card penetration(channels: official site, social networkspartner sites, advertising on transport)Stimulate customers to spread theword about the project via socialnetworks and word of mouth (#, byoffering the most active users optionsof cards pre-order and welcomingmile points)Inspire people to switch to the card byoffering them welcoming mile points,awarding them for referrals and otheruseful actions that expand user baseEncourage customers to useintermodality opportunities by creating“city quests” and giving bonuses for itscompletion (#, use train, bike rentaland bus in 1 trip)Product details Marketing Distribution Business model Plan & RisksConcept
  10. 10. Wide range of distribution channels makes it easy to get a card, use or dispose it10Source: Benchmark company analysis, case data.In order to provide convenient, quick and easily accessibleservice, broad distribution channels should be used2 PropositionSource: Benchmark company analysis, case data.Card top-up Exists now• Vending machines• Ticket windows• Kiosks, shops,tourist centers• Web-site/app• Ticket windows• Vending machines• Tourist centers• ATMs• Auto load• Web-site• Ticket windows• PostTo build a proper network, the infrastructure development is neededApp & siteproviding infoabout networkmobility issuesSpecial vendingmachines on allstations, parkingand bike rentalsPortable card-readers forconductors intrainsCard readers atcheck in/out pointsin transport,parking, rentalsCard purchase Exists nowLoyalType of cardProduct details Marketing Distribution Business model Plan & RisksConcept
  11. 11. 11Source: Benchmark company analysis, case data.The organizational structure will be based on SPV runned by 4operators in cooperation with the government & partners2 PropositionManagement process is held by SPV:• Creating & maintaining cards• Float management• Travel data management• Clearing between operators• Infrastructure and distributionmanagement• Infrastructure and maintenancecosts shared between the 4operators (major part), governmentand partly banks• SNCB covers the biggerpart of costs• Partners and additional serviceproviders pay the royalty for eachtransaction and for the miles• Payed by the customer• Payed by Third party payers(employers, government, otherparties)Management Costs & Income distribution Card paymentPartners of loyaltyprogramTechnical support(cards issuers)SPVIncome fromservicesInvestments andoperation costsInvestmentsControl (partly)SNCB STIBDe Lijn SRWTGovernmentRoyalty forcustomers ThalesBanksPersonalcards/…Credit cardsRent/parkingHoReCaRetailersAirlinesProduct details Marketing Distribution Business model Plan & RisksConcept
  12. 12. • Providing the first issue of the cards tothe citizens• Creating and activating the promotionprogram in offline/online• Developing the smartphone app andweb-site to support the system• Finding partners for the loyalty programand contracting with the banks2 Proposition• Forming SPV by thetransport operators• Making design of the card andspecifying its technical features• Determining the fares andelaborating the loyalty program• Supplying stations with specialequipment2q 2013 1q 2014 1q 2015 1q 20163 quarters 4 quarters 4 quarters1. Product Development 2. Brussels pilot launching• Spreading the system on all majorstations and transport hubs• Increasing the number of partnersinvolved in the loyalty program• Developing the Third Party paymentsprogram within employers and schools• Adjusting the product and faresspecifications according to thecustomers needs3. Country expansionThe project will be divided into 3 phases starting from theproduct development till the whole country is coveredLow demand:People prefer the old ticketsType of risk Threat level Measures to preventCard won’t function due toinfrastructure drawbacksThe loyalty program will not succeeddue to lack of partners• Explain the promotional effect of the program to thecompanies• Involve more partners• Offer the card that is more convenient and/or providescheaper services than simple tickets• Promote new card &explain network mobility pros• Provide the overall access to the card purchase/top-upinfrastructure• Install equipment within all the operatorsThere are some serious risks but they all can be eliminated by certain measures12Source: Benchmark company analysis, case data.Product details Marketing Distribution Business model Plan & RisksConcept
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  14. 14. 14Source: Benchmark company analysis, case data.The proposed system simplifies and unifies current transpor-tation and other relative services and provides intermodality3 SummarycvStakeholders Shared GoalsServicessimplificationSingle card forwide varietyof servicesImprovedintermodalitySuggested SolutionKey advantages:1. Improves the service convenience and accessibility2. Simplifies network mobility3. Aggregates all services within transportation hubs4. Provides loyalty bonuses to save moneyTransportationoperatorsBelgiangovernmentBelgianCitizensServices provided:• Transportation (bus, tram, train, etc)• E-money (retail stores, internet purchases)• Additional services (parking, rental, leisure)
  15. 15. Benchmark Companyhigh-experienced team of fellows with strongspirit that study and work together for 4 years

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